Leading Horsemen Index

Turn on the financial news and you'll likely hear that the S&P 500, Nasdaq-100, or Dow Jones Industrial Average finished the day higher or lower. These indexes are often used to describe the performance of the U.S. stock market, but they leave an important question unanswered: Which companies are actually responsible for driving those movements?

While thousands of companies trade on U.S. stock exchanges, market performance is heavily influenced by a relatively small group of businesses. Companies such as Apple, Microsoft, NVIDIA, and Amazon often carry much greater weight than the average stock, yet investors typically analyze each major index separately. As a result, there is no simple way to measure a company's overall influence across the three largest U.S. equity indexes.

To address this gap, I developed the Leading Horsemen Index (LHI)—a quantitative framework that combines the holdings of the S&P 500, Nasdaq-100, and Dow Jones Industrial Average into one unified ranking. By standardizing portfolio weights and consolidating duplicate holdings, the index calculates a normalized market influence score that identifies the companies with the greatest impact on the overall U.S. stock market.

The project was developed entirely in Microsoft Excel, where a repeatable methodology was created to collect, clean, normalize, and rank publicly available holdings data. The framework groups companies into the eleven S&P 500 sectors, making it possible to analyze market leadership, compare sector influence, and monitor changes over time.

Rather than creating another stock index, the goal of the Leading Horsemen Index is to provide a clearer perspective on market concentration and identify the companies that consistently shape overall market performance.

Every day, investors follow the movement of the S&P 500, Nasdaq-100, and Dow Jones Industrial Average to understand how the U.S. stock market is performing. These indexes are often used as indicators of the overall market, but they raise an important question:

Which companies are actually driving these movements?

Although thousands of companies trade on U.S. stock exchanges, market performance is not evenly distributed among them. A relatively small number of companies contribute a much larger share of overall market performance than the rest. However, because each major index is analyzed separately, it can be difficult to identify which companies consistently influence the market across all three.

This observation inspired the creation of the Leading Horsemen Index (LHI). Rather than looking at each index individually, the project combines the holdings of the S&P 500, Nasdaq-100, and Dow Jones Industrial Average into a single framework. By normalizing company weights across all three indexes, the Leading Horsemen Index ranks the companies with the greatest overall influence on the U.S. equity market.

The project was developed entirely in Microsoft Excel, using a repeatable process to collect, clean, and normalize publicly available holdings data. Companies are then ranked by their combined market influence and organized into the eleven S&P 500 sectors, allowing changes in market leadership to be tracked over time.

Many financial indexes measure the performance of a specific market or group of companies. The S&P 500 tracks approximately 500 of the largest publicly traded U.S. companies, the Nasdaq-100 focuses on the largest non-financial companies listed on the Nasdaq exchange, and the Dow Jones Industrial Average follows 30 established blue-chip companies. While each index provides valuable information individually, there is no simple framework that combines all three to measure the overall influence of individual companies across the broader U.S. equity market.

The Leading Horsemen Index was developed to address this gap. Instead of creating another market index, the project introduces a standardized methodology for identifying and ranking the companies that have the greatest combined influence across the three largest U.S. equity indexes.

Primary Contributions

• 01
  A unified framework

  Combines the holdings of the S&P 500, Nasdaq-100, and Dow Jones Industrial Average into a single ranking system.
• 02
  A repeatable methodology

  Built in Microsoft Excel to collect, clean, standardize, and normalize publicly available holdings data — updatable monthly.
• 03
  Normalized Market Influence Score

  Measures each company's combined weight across all three indexes rather than evaluating each benchmark independently.
• 04
  Company and sector rankings

  Identifies the largest contributors to overall U.S. market performance across the eleven GICS sectors.
• 05
  Supporting visualizations

  Market heat map, dashboard concept, infographic, and website prototype to communicate results clearly.

Although the current version of the Leading Horsemen Index was developed using Microsoft Excel, the methodology was intentionally designed to be scalable. Future versions could automate data collection, integrate Python for data processing, and provide interactive dashboards that update automatically as market holdings change.

Before developing the Leading Horsemen Index, I wanted to understand whether market performance is truly driven by a small number of companies or whether all stocks contribute equally over time. Existing financial research consistently suggests that market returns are concentrated among a relatively small group of companies, providing the foundation for this project.

Hendrik Bessembinder (2018) found that only a small percentage of publicly traded companies account for nearly all of the U.S. stock market's long-term wealth creation. While thousands of companies have been listed on U.S. exchanges, relatively few have generated the majority of long-term shareholder value. This finding suggests that identifying these influential companies is important for understanding overall market performance.

Existing financial research consistently suggests that market returns are heavily concentrated among a relatively small group of companies. As companies such as Apple, Microsoft, NVIDIA, Amazon, and Alphabet have grown, their influence on the largest U.S. equity indexes has increased significantly.

Major stock indexes also demonstrate this concentration. The S&P 500 and Nasdaq-100 are market-capitalization-weighted indexes, meaning larger companies receive greater weight and have a larger impact on index performance. As companies such as Apple, Microsoft, NVIDIA, Amazon, and Alphabet have grown, their influence on these indexes has increased significantly.

Although each index measures a different portion of the U.S. equity market, investors often analyze them separately. As a result, there is no simple way to determine which companies consistently rank among the most influential across all three major indexes. This gap became the motivation for developing the Leading Horsemen Index.

The Leading Horsemen Index was developed using publicly available holdings data from three exchange-traded funds that track the largest U.S. equity indexes: SPY (S&P 500), QQQ (Nasdaq-100), and DIA (Dow Jones Industrial Average). All data collection, processing, and analysis were completed using Microsoft Excel.

Step 1 — Collect Holdings Data

The constituent holdings for SPY, QQQ, and DIA were downloaded directly from their respective fund providers. For each company, the company name, ticker symbol, and portfolio weight were imported into Microsoft Excel.

Step 2 — Clean and Standardize

Company names and ticker symbols were reviewed to ensure consistency across all three datasets. Portfolio weights were converted into a standardized decimal format, allowing the holdings to be compared accurately.

Step 3 — Combine Duplicate Holdings

Many companies appear in more than one index. Instead of treating these as separate entries, duplicate holdings were merged and their portfolio weights added together to calculate each company's total market influence across all three indexes.

Step 4 — Calculate Normalized Weights

Each company's combined weight was divided by the total combined weight of all companies in the dataset to calculate a Normalized Market Influence Score. This process produced a single ranking that reflects the relative importance of every company across the three major U.S. equity indexes.

Step 5 — Rank and Classify

Companies were ranked from highest to lowest normalized weight and organized into the eleven GICS sectors. Additional visualizations — rankings, sector summaries, heat maps, an infographic, and a companion website — communicate the results in a clear and accessible format.

After combining and normalizing the holdings of the S&P 500, Nasdaq-100, and Dow Jones Industrial Average, the results revealed a clear pattern: market influence is concentrated among a relatively small number of companies. While hundreds of companies are represented across the three indexes, only a small group accounts for a significant portion of the total normalized market influence.

Technology companies dominate the highest rankings. Apple, NVIDIA, Microsoft, Alphabet, Amazon, Meta, and Broadcom consistently appear among the largest contributors due to their significant weights across multiple indexes. Outside of technology, companies such as Goldman Sachs, Caterpillar, JPMorgan Chase, and Home Depot also rank highly because of their strong representation within the Dow Jones Industrial Average and the S&P 500.

The analysis also demonstrates that companies appearing in multiple indexes naturally receive a higher Market Influence Score than companies represented in only one benchmark. Rather than evaluating each index separately, the Leading Horsemen Index captures the combined influence of companies across the broader U.S. equity market.

Research Highlights

The Leading Horsemen Index was designed as more than a ranking of large companies. Its primary purpose is to provide a practical framework for understanding which businesses have the greatest influence on the U.S. stock market and how that influence changes over time.

For investors, the index offers several potential applications. First, it provides a simple way to monitor market concentration by identifying whether market performance is being driven by a broad range of companies or by only a handful of large-cap stocks.

Second, the methodology can serve as a stock screening tool by highlighting companies that consistently rank among the most influential across the three major U.S. equity indexes. The index can also support sector analysis by showing which industries contribute the greatest share of market influence.

While the Leading Horsemen Index is not intended to predict future stock prices or provide investment recommendations, it offers a structured way to analyze market influence using publicly available data.

Potential Applications

Although the Leading Horsemen Index provides a new framework for analyzing market influence, there are several limitations that should be considered when interpreting the results.

The first limitation is that the index measures influence based on index representation rather than company performance. A company receiving a high Market Influence Score does not necessarily mean it will generate higher future returns.

Another limitation is that the current methodology relies on publicly available holdings data collected at specific points in time. Although the index was designed to be updated monthly, it represents a snapshot of market influence rather than a prediction of future market movements.

Additionally, the Leading Horsemen Index currently focuses only on three major U.S. equity indexes. Expanding the methodology to include additional indexes, international markets, or alternative asset classes could provide a broader perspective on global market leadership.

Future Research Opportunities

The Leading Horsemen Index was developed to address a simple but important question: which companies have the greatest combined influence across the major U.S. equity indexes?

Traditional market benchmarks such as the S&P 500, Nasdaq-100, and Dow Jones Industrial Average provide valuable information about different areas of the stock market. However, these indexes are usually analyzed independently, making it difficult to identify which companies consistently represent the largest sources of market influence across all three benchmarks.

By combining holdings data from SPY, QQQ, and DIA, the Leading Horsemen Index creates a standardized framework that ranks companies based on their combined presence across these major indexes. Through Microsoft Excel, the project developed a repeatable process for collecting, cleaning, normalizing, and analyzing financial data to produce a Market Influence Score for each company.

The results demonstrate that market influence is concentrated among a relatively small group of companies, particularly within the technology sector. Companies with significant representation across multiple indexes have a greater impact on overall market performance, highlighting the importance of understanding market concentration and leadership.

By combining financial analysis, data visualization, and technology, the Leading Horsemen Index demonstrates how publicly available information can be transformed into a meaningful research tool. This project represents a first step toward creating a more comprehensive framework for analyzing market leadership and understanding the companies that shape the future of investing.

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